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Corporate credibility has an impact directly on the

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Corporate credibility has an impact directly on the effectiveness of advertising.Consumer’sattitude towards the ad and the brand are linked in one way or the other with the corporatecredibility and has been examined by many empirical studies.Keeping in mind the reputationof the organization, these firms use celebrities, endorsers in their ads as the credibility of theseendorsers plays a very important role in persuading consumers to buy the advertised brands(Ohanian 1990).Figure 2.5 from Goldsmith et. al., (2000) explain the relationship betweenthe endorser’s credibility, corporate credibility and consumer’s reaction to advertisement.
|Page22Figure 2.5: The Relationships between Endorser’s credibility, Corporate Credibility andReaction to AdvertisementSource: Goldsmith et. al., (2000)When consumers are familiar with the company already, they usually have developed someperceptions about its credibility. Before the consumers are even exposed to manyadvertisements, the company has already formed an impression on the consumer’s mind overthe time period.Mackenzie and Lutz (1989, p. 53) discusses that the consumer’s attitudetowards the advertiser‘s affects on the ad will be more or less automatic since they havedeveloped an impression. So the success for the customer to attract and to retain takes a hugestep for the advertisers to take while making the advertisement. The consumer not only willhave new information about the company, but incase has had a bad experience then a certainad with relative “role models” can attract a customer and leave a new impression.Consumersusually evaluate the new information they receive about the brand in form of the ad, and theinformation they received has a great influence on their attitude towards the brand’s ad andthe brand itself.“Corporate credibility influences purchase intent because consumer perceptions of thetrustworthiness and expertise of a company are part of information they use to judge thequality of the company’s products and there whether they want to buy them or nor (Fombrun,1996)”.In literature, a standard has already been set for the relationship between the attitude towardsthe advertisement, attitude towards the brand and consumers purchase intention.So theadvertising effectiveness plays a very important role in retaining a customer and making surethat the consumer sticks to the brand. The above mentioned three factors are discussed manyEndorser’scredibilityAttitude towards the adAttitude towards the brandCorporate’scredibilityPurchase intention
|Page23times in advertising effectiveness (Heath and Gaeth, 1994; Kalwani and Silk, 1982;MacKenzie and Lutz, 1989). There is a direct relationship between customer’s attitudetowards the advertisement and his purchasing attention or continuing to stick to the samebrand.In a model by Cox and Locander (1987) it is shown that these two variables havestrong links. If the ad influences the current or the potential customer, then they stick to the

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